Edible oil

Indonesia’s 2022 Palm Oil Exports Expected To Reach 34.67 Million Tonnes; Around 8% Less Than Last Year

Indonesia’s 2022 Palm Oil Exports Expected To Reach 34.67 Million Tonnes; Around 8% Less Than Last Year

Palm oil, a variety of edible oil, is highly popular due to its wide-scale applications, like as a preservative in a variety of foods, a common cooking oil, and even in shampoos, cosmetics, and biofuels. The oil is derived from palm fruit and is distinguished by its higher oil content in comparison to other oil crops. 

Palm Oil In Indonesia 

The Chief Executive of Palm Oil Funds (BPDPKS) said on 22nd December’22 that the palm oil exports in Indonesia in 2022 are estimated at 34.67 million tonnes which is down from the previous year’s 37.78 million tonnes. This was partly due to a temporary stoppage of exports in April’22. Eddy Abdurrahman said at a media briefing that the palm biodiesel consumption in 2022 in Indonesia is noted at 10.6 million kilolitres which are up from the previous year’s 9.29 million kilolitres. 

Indonesia’s Palm Oil Export Ban 

Indonesia, the world’s top palm oil producer, imposed an export ban in late April’22 on crude palm oil and its refined products in order to try and curb rising cooking oil prices which made the Government intervene to control the spiraling prices. Intervention moves followed the ban decision which rattled markets that were concerned about the tightening global edible oil supply and the effects of Russia and Ukraine’s conflict on sunflower oil shipments from the key exporting Black Sea region. The ban policy was removed after 3 weeks and the producers of palm oil were given an export quota based on their domestic sales volume in order to ensure local supply. The gradual easing of the country’s restrictions including the so-called domestic market obligations would see the shipments returning to normal at around 36-38 million tonnes in 2023. 

Indonesia’s Palm Oil Requirement for Biodiesel 

On 21st December’22, the BPDPKS posted a revised estimate for the country’s palm oil inventory in the upcoming year as Indonesia’s vegetable oil consumption is expected to show an increase along with the allotment of a planned higher portion of palm oil for biodiesel in the coming year. Indonesia has planned to increase the 30% mix of palm oil in biodiesel to 35% from 1st January’23 while at the same time, authorities are running tests for a 40% palm oil mix in fuel known as B40. As per Eddy, the production capacity for achieving the goal might not be sufficient. The results of the B40 road tests were good but the other factor to consider is that with the B40 fuel, biodiesel consumption volume could reach up to 15 million KL with a production capacity of around 16 million KL, and maintaining such a narrow gap would prove risky. 

The BPDPKS is in charge of collecting proceeds levied on Palm Oil Exports to distribute to various programs and the upcoming year’s levy collection is expected at 30 trillion rupiahs with the biodiesel subsidy spending to be seen at around the same price. 

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